Boris Ignachkov If you’re a law student, you might find the case of Allied Maples Group v Simmons & Simmons [1995] 4 All E.R. 907 really interesting. It’s an important case that explores the complexities of professional negligence and how damages can be recovered for the “loss of a chance.” In simpler terms, the case looks at what happens when someone receives bad advice from a professional that causes them to miss out on a potential opportunity. It’s definitely worth checking out!
Legal Principles and Key Points in Allied Maples Group v Simmons & Simmons
- In the case of Allied Maples Group v Simmons & Simmons [1995] 4 All E.R. 907, it was held that a claimant can recover damages for ‘loss of a chance’ stemming from negligent professional advice where there was a real and substantial chance that, had the independent advisor not been negligent, the loss would have been avoided.
Facts of the Case Allied Maples Group v Simmons & Simmons
- C wished to acquire multiple furniture shops belonging to X. D acted as their solicitors in this matter.
- D wrote up a contract containing a warranty clause, allowing C to obtain the shops without being bound by X’s previous liabilities.
- During negotiations with X, this warranty clause was deleted and replaced with a clause that did not offer this protection.
- D failed to advise C on the effect of the replacement clause. As a result, the acquisition went ahead.
- From May 1990, C was subject to claims stemming from defaults on the properties they had acquired from X. In May 1991, C brought proceedings claiming damages for D’s negligent advice.
- C argued that if they were made aware of the replacement clause’s effect, they would have acted to renegotiate with X, thereby minimising its losses. D argued that C could not show D was the factual cause of their losses.
Issues in Allied Maples Group v Simmons & Simmons
- Could C establish factual causation where the loss depended on the potential future decisions of X, an independent third-party to D?
Held by the Court of Appeal (Civil Division)
- Finding for C, that where determining financial losses depends on an assessment of uncertain but potential events, the court had to assess the likelihood of the alternative succeeding. There was a real and substantial chance that X would have afforded an indemnity if D had made C aware of the replacement clause’s effect. Therefore, C had established factual causation.
Stuart-Smith L.J.
- In this case, the question of causation is closely related to the question of determining damages. This depends upon what C and X would have done in a hypothetical situation, namely if D had given the proper advice to C.
- Although the question is hypothetical, it is well established that C had to prove that if they had been given the right advice, they would have sought to negotiate for protection. Since this is a matter of inference, this court will more readily interfere with a trial judge’s findings than if it was one of primary fact. Even so, there was ample evidence to support the judge’s conclusion.
- In Davies v Taylor [1974], Lord Reid stated that you cannot prove a future event will happen, but you can evaluate the chance. In reality, there is not much difference between a probability of 51% and 49%. As long as the probability is substantial, it should be seriously considered. The balance of probabilities approach was rejected.
- “In my judgment, C must prove as a matter of causation that he has a real or substantial chance as opposed to a speculative one. If he succeeds in doing so, the evaluation of the chance is part of the assessment of the quantum of damage, the range lying somewhere between something that just qualifies as real or substantial on the one hand and near certainty on the other. I do not think that it is helpful to seek to lay down in percentage terms what the lower and upper ends of the bracket should be” [919].
Lord Millet Dissenting
- “The chance of which C complains they have been deprived is the chance of persuading X to act against their own interests by reinstating a warranty which their own solicitors had already struck out or to give some other protection against a risk for which their own solicitors had not thought fit to provide. X might have yielded to the C’s demand, of course, particularly if they believed (wrongly) that they might lose the deal if they did not. But there are no objective criteria by which the chance can be evaluated. X would no doubt have consulted their solicitors. If so, they would if correctly advised have learnt that it was not standard conveyancing practice for vendors to give the protection which the plaintiffs were seeking…The outcome would then have depended on X’s perception of the relative strength of the parties’ bargaining positions, the extent of the risk which they were being asked to assume and the effect on the deal if they refused. These are all subjective matters; none of them is known and none can be inferred” [931].
Significance of the Case in Legal Development
Allied Maples Group v Simmons & Simmons significantly impacts the realm of negligence law, specifically concerning economic losses:
- Chaplin v Hicks [1911]: This earlier case also dealt with the loss of a chance in a context where the claimant missed an opportunity due to another’s negligence.
- Spring v Guardian Assurance Plc [1994]: Addresses negligence in providing employment references, which parallels the professional duty of care seen in Allied Maples.
- Mount v Barker Austin [1998]: Similar to Allied Maples, this case further examines the responsibilities of financial advisors under negligence claims.
Exam Questions and Answers
Below you will find answers to questions that are most commonly asked based on this case.
How does the court quantify ‘loss of a chance’ in cases where the outcome is not binary?
Under current UK law, quantifying ‘loss of a chance’ involves assessing the probability of the lost opportunity materializing had the professional not been negligent. For instance, in Gregg v Scott [2005], the House of Lords held that damages could be awarded for loss of chance if the claimant could show that the chance was real and substantial, but not merely speculative.
What criteria determine when a professional’s advice is negligent enough to warrant damages for lost opportunities?
The criteria for determining whether a professional’s advice is negligently poor enough to warrant damages involve establishing that the advice fell below the standard expected of a reasonably competent professional in that field, and that this failure directly led to a loss of opportunity. This was underscored in BPE Solicitors v Hughes-Holland [2017], where the Supreme Court reaffirmed the need for a clear causal link between the advice and the financial loss.
How have subsequent cases refined the application of the principles established in Allied Maples Group v Simmons & Simmons?
Since Allied Maples, subsequent cases have refined the application of these principles, particularly focusing on the evidentiary standards required to demonstrate loss of a chance. In Perry v Raleys Solicitors [2019], the Supreme Court emphasized the necessity for claimants to prove on the balance of probabilities that they would have taken the opportunity that was lost due to the negligence.
